Skip to main content

The ultimate incentive scheme?

Sep 26 2003 by Brian Amble
Print This Article

Last week he banned internal email because it wastes staff time and reduces customer satidsfaction.

Now John Caudwell, the multi-millionaire owner of high street retailer Phones 4U, has announced the employee incentive scheme to end all incentive schemes as part of his battle with market leader Carphone Warehouse.

At a conference in Birmingham, Mr Caudwell produced £1m in cash packed into suitcases. He then said that each of the company's 25 senior sales directors could earn up to £1 million per head in bonuses if they hit sales and customer service targets.

A further £10 million is being dangled in front of 56 sales managers and 340 store managers.

The loyalty scheme starts next month for associate sales directors and in January 2004 for everyone else. The money, once achieved, could be drawn within two years.

The £35m loyalty fund is part of the £405m the Caudwell group got through the sale of a mobile phone servicing business to Vodafone.

Caudwell, who has described British bosses as "corporate tossers", is renowned for his unusual approach to staff motivation. Last year, he ran a competition to find young management talent with a £100,000 job as the prize.

Motivated staff create exceptional customer satisfaction, he believes, which in turn will increase Phone4U's profits.

"What I am trying to put into the people in the business is that customer excellence produces profitability. If we can really exceed customers' expectations then the amount of business that will come into our stores in terms of referrals, repeat business and recommendations will be just phenomenal," he said.

"What I am trying to do is replace an element of the marketing and advertising budget with the best advertising that there is, which is the referral mechanism.

"I would be gutted if I do not pay out this money to somebody. I have announced this scheme to everyone and if in a year's time there are not some sales directors who are scoring in a big way on this millionaire's pot, then either all of my strategy has failed or I have bullshitted everybody."

Latest book reviews

MORE BOOK REVIEWS

Super Adaptability: How to Transcend in an Age of Overwhelm

Super Adaptability: How to Transcend in an Age of Overwhelm

Max McKeown

Max Mckeown's heavyweight new book draws from neuroscience, psychology and cultural evolution to develop a practical framework for human adaptability. It might also help you move from paralysis into abundance

Relationship Currency

Relationship Currency

Ravi Rajani

In an era where AI can draft emails and manage our schedules, 'Relationship Currency' is a timely reminder of the importance of investing in genuine human connection.

Hone - How Purposeful Leaders Defy Drift

Hone - How Purposeful Leaders Defy Drift

Geoff Tuff and Steven Goldbach

In a business landscape obsessed with transformation and disruption, Hone offers a refreshingly counterintuitive approach to today's organisational challenges.